Time Inc cutting 4% jobs as it aligns to digital age

Magazine publisher Time Inc is cutting roughly 300 jobs, or 4 per cent of its global workforce, in an effort to restructure its priorities to the video and digital platforms.

The announcement came Tuesday as Time Inc - the publisher of Sports Illustrated, Fortune, and People and other magazines apart from the iconic Time - navigates a period of "rapid transformation", according to a memo from chief executive Rich Battista.

In a note to Time's roughly 7,500 employees worldwide, Battista said the positions of 300 employees, or 4 per cent of its workforce, will be eliminated through layoffs and buyouts. No details were provided about where the specific job cuts would be taking place.

"Time Inc is a company in rapid transformation in an industry undergoing dynamic change," Battista said in the email. "Transformations do take time and patience, but I am encouraged by the demonstrable progress we are making as we implement our strategy in key growth areas, such as video, native advertising and brand extensions."

The year began with speculation that Time Inc would find a buyer, but no deal was struck as the magazine group doubled down on pursuing its "strategic plan".

On 28 April, Time ended more than six months of buyout talks initiated by Meredith, the rival magazine publisher, and an investor group led by Edgar Bronfman Jr, the former controlling shareholder of Warner Music. Despite Time's recent struggles to grow revenue amid declining print advertising sales and circulation, its board rejected those offers, arguing that the company's brands were better off under current management.

Battista was promoted to chief executive in September, taking over from long-time publishing executive Joe Ripp, who became chief executive when the publisher was spun-off from Time Warner in June 2014. Battista has said Time must become less dependent on print sales, and on People magazine, which remains the company's largest revenue source. Since taking over, he has sought to emphasize the digital growth of its lifestyle titles: RealSimple, InStyle, Cooking Life and Southern Living, among others.

A year ago, Time launched a digital video platform, People/Entertainment Weekly Network, which hosts shows such as BingeWorthy, and numerous profiles and interviews. Time also has started new digital platforms that have little or nothing to do with its flagship publications.

That plan was to focus more on video and digital, as well as native advertising, digital sales, licensing and branding.

The news of the layoffs came weeks after Battista sent a company-wide memo on 23 May, along with a survey that sought to "help us better understand our culture" and find ways Time Inc can "align on a strategy and vision, execute against that strategy and renew itself over time." The survey reportedly concluded on 1 June.

The company refocus will aim toward digital sales, and Gregory Giangrande, Time Inc's head of human resources, said the company expects a "hiring spree for digital sellers."

Time Inc has struggled, along with other traditional print publications, as they refocus on digital media. Time Inc's print advertising revenue declined 21 per cent to $212 million in this year's first quarter.

In its public quarterly report, the company noted these declines were due to, among other factors, the reorganisation of the advertising sales force. The past year has seen a couple reorganisations and strategy changes in advertising sales.

Internal anxieties weren't soothed when Time Inc hired McKinsey & Co, a cost-cutting consultancy, to find ways of restructuring last month. McKinsey & Co has "set up shop in closed conference rooms," Advertising Age said citing a source within Time Inc.

Giangrande and Battista disputed reports of declining morale from within the organisation. Giangrande said the remaining 7,200 Time Inc employees are "energized" and that "morale is not impacted by and large by this action today."

"Clearly, nobody is happy that 300 employees are leaving the company," he said.

Battista also credited the way Time Inc has been upfront about reorganisation. The company has not shied away from declarations of the re-engineering of cost structures.

"People who work here understand (reorganisation) and appreciate the candour and that we're doing it in a thoughtful and honest way," Battista said.